Twin Cities housing trends show luxury listings are surging.
Minnesota's housing market is seeing record prices, particularly in the Twin Cities metro.
But, while luxury home sales are booming, a significant affordability gap is emerging, making it harder for first-time buyers to enter the market despite stable mortgage rates.
"Buyers aren't as concerned about interest rates and affordability," says President of Minnesota Realtors Patti Jo Fitzpatrick. "I think they believe that real estate is a good investment. The effect that it has on other buyers and sellers is some of the sellers are losing out. People are going for more expensive homes."
Fitzpatrick says homes are selling fast, highlighting a competitive landscape where financial flexibility plays a key role in successful sales.
And that has meant Minnesota home prices have hit an all-time high and the housing market is booming. Both statewide and Twin Cities metro median home prices hit new record highs in June, reaching $401,000.
Fitzpatrick says this surge is fueled by increased buyer and seller activity.
"There's more inventory coming on," she says. "I think people are just starting to feel that this is what real estate is going to be like. They're not waiting for interest rates to drop, changes with the economy. I think this is the new norm."
While luxury sales are up, affordability remains a concern for many, especially first-time buyers because homes continue to sell quickly - and often above asking price.